The County of Orange plans to make one of the larger local office purchases seen in the area next year, for a five-building cluster of properties along South Grand Avenue used by OC’s Social Services Agency (SSA).
The offices are a few blocks west of the Costa Mesa (55) Freeway, near the headquarters of trading card rating firm Collectors Holdings Inc., previously known as Collectors Universe. The complex totals nearly 212,000 square feet.
The purchase price: $100.
Yes, $100.
That deal doesn’t represent the latest example of falling office prices in OC since the pandemic, but rather the conclusion of a capital lease structured between the county and the building’s longtime owner, Newport Beach-based developer Centurion Partners LLC.
Under a capital lease—a structure seen occasionally in government deals—a tenant has the right to use a capital asset for a specified period without obtaining full ownership, in exchange for ongoing lease payments. At the end of the lease, it has the option to complete the purchase, usually for a nominal amount.
In this case, the $100 price tag does not reflect the value of the office property, but instead fulfills a compliance measure in such property transfers between landlords and tenants, according to Centurion Managing Partner Scot Matteson.
“You have to put a dollar amount when a property reverts back to the tenant,” he said.
The deal’s been a moneymaker for Centurion. The county has occupied the buildings since the early 1990s, and Matteson estimates the tenant has paid nearly $180 million rent over the time he’s owned the property.
The 13-acre complex initially held a trio of buildings, and Centurion built two additional offices for the county roughly 20 years ago. Those additions, plus other maintenance work, ran roughly $50 million.
Main Uses
The Santa Ana complex “is a hub for five distinct SSA departments, each specializing in vital assistance programs,” according to county filings pertaining to the planned purchase.
• The SSA’s Assistance Program offers comprehensive support, including Medi-Cal, CalFresh, general relief and cash assistance for immigrants.
• Family Self-Sufficiency oversees programs such as CalWORKs cash assistance, welfare-to-work and refugee services.
• Training and Career Development “provides essential training for SSA staff and community partners, with collaborative initiatives like evening classes in conjunction with Cypress Community College,” filings indicate.
• Program Integrity “plays a critical role in ensuring the effective functioning of SSA divisions through various functions, such as appeals, civil rights, grievance reviews, income eligibility verification systems and fraud detection.”
• The Mentor, Onboarding, and Quality Assurance team offers support to new hires and mentorship to eligibility staff.
Nearly 850 SSA staff work at the complex, and the group serves on average 11,268 clients per month.
The primary areas serviced include Santa Ana, Tustin, Costa Mesa, Irvine, Balboa Island, Corona del Mar and Newport Beach.
The county is expected to take ownership of the buildings next year, and SSA “intends to continue operating the property consistent with its existing use.
